With reference to the terms Deflation and Disinflation, which among the following statements is / are correct?
1. Deflation is negative inflation, Disinflation is negative inflation growth
2. Deflation increases the real value of money, Disinflation has no impact on value of money
Choose the correct option from the codes given below:

Answer: [A] Only 1 is correct

In economics, deflation is a decrease in the general price level of goods and services. Deflation occurs when the inflation rate falls below 0% (a negative inflation rate). This should not be confused with disinflation, a slow-down in the inflation rate (i.e. when inflation declines to lower levels) Inflation reduces the real value of money over time; conversely, deflation increases the real value of money – the currency of a national or regional economy. This allows one  to buy more goods with the same amount of money over time.

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